City Auditors Critical of LP&L Accounting Procedures

On March 27, 2013, City of Lubbock auditors completed their audit of LP&L. Their findings and recommendations are set out here.

As expected, the auditors found “deficiencies” in documentation for purchase invoices. The audit also found that procurement file documentation related to how winning bids are selected is deficient. In my previous article, I detailed some of the concerns voiced by City of Lubbock financial staff as well as the city manager regarding the lack of financial controls at LP&L. The audit report recommends that the LP&L purchasing manager, because of the significant amount of goods the purchasing manager purchases each year, report to an administrative position rather than a lower level employee. The audit also recommends that LP&L designate a finance level executive to approve large invoices before they are sent to the City of Lubbock for payment. This change would allow greater assurance by the City of Lubbock that the invoice had been approved at a high level and therefore was a legitimate invoice.

The most significant recommendation for LP&L is that the procurement system be updated and simplified, especially as regards to when a manager can declare an emergency and sign off on a no-bid service and when such services require job order contracts and competitive bidding.

The last recommendation is for the City and LP&L to enter into a formal service agreement to clearly delineate the duties and responsibilities of each entity.

The recommendations are a step in the right direction for LP&L. I hope that the LP&L board votes to adopt them immediately.